The European Court of Justice issued three rulings on 12 March 2026 that clarified VAT deduction rights across the EU. The decisions confirmed that Spain can maintain its entertainment expense restrictions under Article 176, that late invoices do not preclude deductions if claimed within the limitation period, and that technical failures in electronic refund transmission cannot cancel refund claims. These rulings reinforce that VAT rights cannot be undermined by excessive formalism or administrative shortcomings.
On 12 March 2026, the ECJ confirmed that Spain’s restrictions on VAT deductions for entertainment and hospitality expenses are compatible with the EU VAT Directive under Article 176, provided they do not materially expand earlier exclusions.
The ECJ held that VAT deductions cannot be denied if the taxpayer receives invoices later, acts in good faith, and claims the deduction within the applicable limitation period, even if the invoices were received years after the transaction.
The ECJ ruled that technical transmission errors cannot render a refund claim non-existent; authorities must act diligently, inform the applicant, and allow corrections.
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